Deutsche Bank hurt by equity derivatives
Weaker- t han- expected fourth-quarter results in Deutsche Bank AG 's equity derivatives and structuredfinance businesses weighed on performance at its investment bank, reflecting the challenges the lender faces to generate profits in core units while slashing costs, according to people familiar with the matter.
Germany's largest bank hasn't disclosed results of those two securities businesses ahead of its earnings report scheduled Thursday. But it warned last week of a year-on-year decline in fourth-quarter revenue in its investment bank, citing "challenging market conditions."
The disclosure jarred investors, helping send the bank's shares to their lowest level since 2009. The shares are down 25% this year, compared with around 15% for the Stoxx Europe 600 index of banks.
Deutsche Bank, which is shrinking as part of a companywide overhaul under new coChief Executive Officer John Cryan, warned last week that it would post a €2.1b fourth-quarter loss and its first full-year loss since 2008. Litigation and restructuring charges continued to add to the lender's woes. Trading and lending headwinds in some areas of global credit markets and stock-market volatility have created challenges for many investment banks.